Major Basin Reserves Estimate: Oil ~10 Years, Gas ~10-17 Years

How Much Longer Can Shale Support U.S. Oil and Gas Production?

Friday, 07/21/2023  rbnenergy.com Published by: David Braziel  

Back in the early 2000s, the outlook for energy security in the U.S. was bleak. Domestic oil production had been on a steady decline since 1985 and gas production was also well off its apex in the 1970s. M. King Hubbert’s concept of peak oil ignited fears of eventual energy scarcity. Given fossil fuels’ ubiquity underlying our entire Western economic and industrial structure, it’s no wonder that folks were concerned. But then the Shale Revolution changed everything. It’s often been said that necessity is the mother of invention and, after many trials and with considerable ingenuity, U.S. producers learned to wring massive volumes of previously trapped hydrocarbons from shale and gave the U.S. energy industry a new lease on life. But there are still limits on how much crude oil, natural gas and NGLs can be economically produced — and concerns lately that the best of the U.S.’s shale resources may have already been exploited. In today’s RBN blog, we examine crude oil and gas reserves: how they are estimated and what they tell us about the longevity of U.S. production.

One of the most pressing questions in the energy space lately is how long the major producing regions in the U.S. onshore will hold out. A lot of producers have talked in their recent investor presentations about the fact that the opportunities for prolific new wells are dwindling in some regions — what’s commonly known as acreage degradation. That should be concerning to everybody, from consumers to policy-makers. Upstream investors want to be sure that producers have adequate acreage inventory to maintain production while midstreamers and downstream companies want to know that their assets won't be starved of supply.

Link to full article with graphs:  https://rbnenergy.com/say-youll-be-there-how-much-longer-can-shale-...

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Replies to This Discussion

Permalink Reply by Jesse Joyner on July 24, 2023 at 7:01

Good stuff, Skip. Thanks for posting this. Pretty darn interesting.

Permalink Reply by Skip Peel - Mineral Consultant on July 24, 2023 at 7:22

You're welcome, Jesse.  RBN Energy is one of my favorite analytic sources.  I've been reading articles by other trustworthy energy focused media along these same lines for a while now.  I think it should inform how mineral owners manage their assets.

Permalink Reply by Jesse Joyner on July 30, 2023 at 19:22

I don't think David Braziel's assessment that we only have ten years left of oil reserves in the major basins in the U.S. is accurate. Or maybe I missed something when I glanced at his article before the paywall went up at RBN Energy.

I suspect the U.S. probably has another 50 years of oil reserves (at least). Or maybe more, depending on the application of new technology to unlock such formations as the TMS.

Check out this article on statista.com.  When you clink on the link, you'll see that their graph has over 34 trillion cubic feet of production in 2050. And the trend is up, not down in 2050. This squares with my thinking, i.e., U.S. reserves will continue to supply O&G for many decades to come. 

Shale gas and tight oil plays production in the U.S. 1999-2050

Published by Jessica Aizarani, May 22, 2023

Shale gas and tight oil production in the United States is forecast to increase to nearly 35 trillion cubic feet by 2050, up from 26.91 trillion cubic feet in 2022. Shale gas refers to natural gas that is trapped within dense shale formations. Tight oil is crude oil contained in such rock formations. It is extracted by drilling wells and pumping a sand, water, and chemical mixture into the rock. The pressure under which the mixture is pushed into fissures cracks the rock open, allowing for the gas and oil to be removed.

Origins of U.S. shale gas production

The extraction of shale gas and tight oil in the U.S. has increased dramatically since 2000; from about 300 billion cubic feet to over 26 trillion cubic feet in 2022. The economic viability of shale exploration is a result of technological advances in horizontal drilling and hydraulic fracturing (fracking), as well as a surge in oil benchmark prices in the late 2000's and early 2010's. China's fast-growing economy meant it required ever greater amounts of petroleum products, while the largest oil producing body, OPEC, tightly controlled production output in order to push prices higher. This led to the WTI crude oil price climbing to an annual average of nearly 100 U.S. dollars in 2008, despite the onset of the financial crisis. Although early shale pioneer Mitchell Energy had experimented with horizontal drilling and fracking, it took until the 2000's for the technology to hit off.

Shale gas production is concentrated primarily in regions such as the Northeast and the Gulf Coast, with Appalachia being the most productive U.S. natural gas region. Chevron is the largest U.S. shale oil producer by daily crude oil output.
Here's the link: https://www.statista.com/statistics/183740/shale-gas-production-in-...

Shale gas and tight oil plays production in the United States from 1999 to 2050 (in trillion cubic feet)



 

 

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